Reference-dependent behaviour of paua (abalone) divers in New Zealand
AbstractWe study dynamic labour supply using data on paua (abalone) divers in New Zealand. The divers face stable, flat prices per kilogram after each catch, but experience transitory wage changes due to varying weather and water conditions, and are free to vary their daily working hours and display an intermittent working pattern. We find non-linear wage elasticities, rejecting the standard neo-classical prediction. We explore potentially distorting factors, but find little evidence. Applying Kszegi and Rabin’s (2006) theory where workers have both income and hours targets could explain our result. In particular, our divers appear to be primarily guided by the hours target. http://hdl.handle.net/2077/26589
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Bibliographic InfoPaper provided by University of Gothenburg, Department of Economics in its series Working Papers in Economics with number 513.
Length: 44 pages
Date of creation: 26 Aug 2011
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labour supply; wage elasticity; income e target; reference-dependent;
Find related papers by JEL classification:
- J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
- J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
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